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FAREED ZAKARIA GPS

Interview With Lawrence Summers

Aired January 16, 2011 - 10:00   ET

THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.


FAREED ZAKARIA, HOST: This is GPS, THE GLOBAL PUBLIC SQUARE. Welcome to all of you in the United States and around the world. I'm Fareed Zakaria.

While America remains inwardly focused on the gruesome shootings in Arizona, Washington must prepare for an extremely important global event coming up this week -- China's President, Hu Jintao, is coming to town.

Now, at one level, U.S.-Chinese relations are in pretty good shape. Ever since Richard Nixon, American presidents have worked to integrate China into the international system. China, for its part, has seen its primary mission as economic development, and it has been cooperative, not competitive, with the United States. The godfather of modern China, Deng Xiaoping, directed Beijing to adapt a strategy of humility and a sort of tacit alliance with Washington in its external relations. So the grown-ups on both sides have been in charge and seem sensible.

But there are new pressures in the two countries that are urging a more combative relationship. You only have to listen to a Congressional debate on China to understand the forces at work here in the United States. And yet, it is in China, which is reputed to have the more controlled, rational, strategic decision-making system, where policy now seems pretty unpredictable.

Over the past two years, China has dealt with the Obama administration in a very puzzling manner. Obama came into office talking about the importance of great power relationships and the supreme importance of strategic ties with China. He traveled to China early, and he marked the trip by accommodating the Chinese in various symbolic ways.

Despite all of this, Beijing has been distinctly combative towards Obama. It overreacted to his meeting with the Dalai Lama and to a U.S. arms sales to Taiwan, which were both predictable and routine events. It humiliated Obama at the Copenhagen Climate Change Conference. And then, on January 10th, while Secretary of Defense Robert Gates was in China, it refused to agree to senior military to military ties between Beijing and Washington.

Now, these actions could be viewed as a series of misperceptions or as single events, one-offs. But, when taken along with China's new assertiveness in Asia, they suggest there's some larger trend at work, and there's a lot of speculation among China watchers as to what's causing this turn. Is it the change in leadership that's taking place in 2012, the rise of a new, younger cadre of officials, the importance of China's neoconservatives, rising Chinese nationalism?

Dai Bingguo, the man who's in effect China's foreign minister, recently wrote a 9,000-word essay setting out China's foreign policy and explicitly rejecting any talk of replacing or challenging-American supremacy. So this was a sign that the Communist Party still adheres to Deng Xiaoping's line of conciliation.

But there is another center of power in China that might not see things in exactly this light. The People's Liberation Army, the largest army in the world, has always been a force within the Chinese system, but it was formerly subordinate to the Communist Party. From Mao to Deng, senior Chinese party leaders always had military credentials. But this hasn't been true for the last 15 years, and the PLA has been given larger budgets and greater autonomy.

In his recent trip to China, when meeting with President Hu Jintao, Secretary of Defense Robert Gates mentioned the Chinese military's test of its new stealth fighter. Here's the bizarre part, Hu -- President Hu appeared not to know about the test flight. The Chinese military, perhaps because of these budgets but also its ideological and strategic mindset, seems on a separate course, which considers the U.S. as China's sworn enemy and believes that a conflict between Beijing and Washington is inevitable.

So the big question for U.S.-China relations in general is are the grown-ups really still in charge, and, specifically, do the civilians in China's Communist Party control the military?

You can read more about this in my column in this week's "Time" magazine and on Time.com.

We have an important show for you today. First up, Larry Summers, in his first interview since leaving the White House. The president's top adviser on economics talks to me about jobs, recovery, and much more.

Then, "What in the World?" Playground politics on the world's stage. Did President Obama insult the Brits? Does America now have a new best friend?

Next up, a terrific GPS panel with Bernard-Henri Levy, among others. We'll take a look at guns in America. This country has more guns per capita than any on earth. What sets us apart from the rest of the world, and why.

Finally, a "Last Look" at the pay stub of world leaders. What's the right pay for the person running your country?

Let's get started.

(BEGIN VIDEOTAPE)

ZAKARIA: Joining me now, Lawrence Summers, President Obama's former Chief Economic Adviser, the chair of the National Economic Council, formerly Secretary of the Treasury, formerly president of Harvard University.

Welcome, Larry.

LAWRENCE SUMMERS, FORMER DIRECTOR, NATIONAL ECONOMIC COUNCIL: Good to be with you, Fareed.

ZAKARIA: The biggest problem in America right now is the jobs numbers, which, again, this week were disappointing. And what is clear at this point is even given the nature of the recovery, we are not seeing jobs come back in the numbers that they have historically come back and the -- and the numbers that economic models like Okun's rule, what Woodlaw would suggest. What's going on?

SUMMERS: Fareed, the main thing we have to do to accelerate the process of job creation is to accelerate economic growth. I think that's starting to happen. You look at the statistics, the flow for the last couple months has been a good deal more favorable than it had been.

And, historically, the behavior of output precedes the behavior of employment. When demand picks up, the first thing firms do is ask their existing workers to do more. The next thing they do is ask people to work some overtime. And the last thing they do is hire more people.

So it's a process that unfortunately takes time, but I think the prospects for starting to see significant employment growth and reductions in unemployment right now are better than they've been in the United States in a number of years. That doesn't mean we don't have to keep at it.

ZAKARIA: But they're -- but they're better than they -- than they were. But you still have the problem that to get back to full employment, six and a half percent, you're going to need job creation on a much more significant scale than you're seeing now and a lot of people are wondering, was this downturn just cyclical or is there something structural that's happened? Is there a shift in the economy where some of these jobs just aren't going to come back?

SUMMERS: Some of the jobs that were lost aren't going to come back, but some of the jobs are going to come in new places. We're educating more kids each year. We have more needs for health care each year. What's happening in information technology, which was so dramatic in the 1990s, a little more quiescent in the middle part of this decade, is taking off again with the iPad, with all that's happening on mobile devices.

So what has always been the American story is that jobs are lost in some sectors and jobs come back in other sectors.

ZAKARIA: So you don't see this --

SUMMERS: To be sure -- to be sure --

ZAKARIA: (INAUDIBLE) this is different? SUMMERS: This recession is the most serious recession by a wide margin that we've had since the Second World War. This financial crisis really was profoundly serious.

The precedents for it, the way in which we overbuilt in the housing sector, that created a lot of jobs for workers in construction, much more than were sustainable. And now, because we have an overhang of houses that are vacant, malls that are vacant, of office buildings that are vacant, we have this tremendous drop in the demand for construction workers and construction jobs and for a certain class of men who haven't gone to college that's a substantial part of employment. And so we're going to have problems with us in that sector for quite some time to come.

But I think the most important thing we can do is to raise the demand, a level of demand in our economy so as to create more output.

ZAKARIA: So how do we do --

SUMMERS: That's what's most important in the short run.

ZAKARIA: So how do you do that?

SUMMERS: In the medium run, there are a whole set of issues about education and innovation that we can talk about.

ZAKARIA: So you raise demand in the short term --

SUMMERS: How do we -- how do we do it? We took a very important step last fall in the tax compromise that was reached between the two parties. The policy commitment to eliminate or to scale -- to give a payroll tax holiday for next year will be an important spur to employment.

There's more we can do. President Obama has put great emphasis on the goal of doubling our exports over the next five years. We're actually ahead of pace to do that since he first put that goal forward a year ago. That's about standing up for American producers internationally, something he'll be doing very strongly when the Chinese premier visits.

And third, and something that I think is very, very important, you know, we run a budget deficit, Fareed, when we spend more than we earn and we have to borrow. We also run a deficit when we allow our infrastructure to run down and we don't repair it, because in the same way we're passing the burden on to future generations and, frankly, that's something we've been doing in this country for a long time.

ZAKARIA: So --

SUMMERS: If a time when we have unemployment approaching 20 percent in construction and a 10-year bond rate in the neighborhood of three percent, if that's not a time to invest in repairing our infrastructure, I can't imagine when there would be a better time.

ZAKARIA: OK, so corporate America is holding $2 trillion in cash, and the big question is why are they not spending it? You talk to businessmen, and they will, to a person, tell you it's uncertainty that they worry about, uncertainty in the regulatory environment, tax environment, and they all say that the Obama administration has -- has been suspicious or anti-business and that's why they aren't spending.

SUMMERS: Well, I think it's important to look at some aspects of the record. Corporate profits have risen by 60 percent in the last two years to record levels. That's as fast as they've risen in any two-year period.

People talk about uncertainty. One measure of uncertainty is the volatility in the stock market. That has fallen more than in half since President Obama took office. And if you look -- if you look back through history, it's actually quite a remarkable pattern. Business was far more hostile to the new deal in the 1930s that saved capitalism than they have been in the 1990s.

After the doldrums of the 1950s, business was fiercely hostile to President Kennedy and the program that drove the economy and profitability to new heights in the 1960s. Some of the periods when business was most enthusiastic about the directions of policy in the 1980s were periods that, in retrospect, were marked by very slow productivity growth, relatively weak markets, and the huge accumulation of debt.

So I think if one looks back, this is not an isolated instance in being a moment when the policies that took the country forward, that lifted the country out of recession, that ultimately worked out best for business turned out in the short run to arouse -- to arouse concern and real anger in the business community. That's been the case at most of the moments when the country has moved forward.

But if you look overall, the foundation for prosperity, growth and profitability in the United States today is far stronger than it was two years ago. And that's not just my judgment, that's not just President Obama's judgment, that is the overwhelming judgment if you look at any market indicator, and I think that -- or you look at any profit figure -- and I think that should tell us something very fundamental about the policies that have been pursued.

ZAKARIA: But, culturally, you've got to admit that there's something about -- about President Obama and the business community, there seems to be a disconnect. I mean, you talk to businessmen, you really get the feeling that they think he doesn't get them, he doesn't appreciate them.

SUMMERS: I think it's been a difficult -- I think it's been a difficult time for business. I think if you look -- and it's not just business, it's the -- it's the media, it's the Congress, it's many different parts of the country where there has been a kind of disillusionment, that widespread swaths that our citizenry feel.

President Obama is very direct and candid, and he has talked about that with business leaders, and sometimes I think people can confuse the messenger and the -- and the message. And I think there are some in the business community who believe that the anxiety that the public feels toward business about financial practices, about failures to create jobs for ordinary Americans, about loyalties that go beyond the country in which they're based. I think some businesspeople think those anxieties are coming from Washington and I think the reality is much more that Washington is responding to what is a palpable unease in the land, and I think that is a very real challenge for business.

ZAKARIA: We'll be right back. More with Larry Summers and what to do about the American economy, and more from him on what it's like working with President Obama.

(END VIDEOTAPE)

(BEGIN VIDEO CLIP)

ZAKARIA: What do you think the number -- American growth number will clock in at for 2011?

SUMMERS: As Harold Wilson once suggested, you should name a number or name a date, but never name both.

But, seriously, Fareed --

(END VIDEO CLIP)

(COMMERCIAL BREAK)

(BEGIN VIDEOTAPE)

ZAKARIA: And we are back with Larry Summers, formerly the head of the National Economic Council, before that Secretary of Treasury, in the middle president of Harvard University.

Larry, you've worked with two Democratic presidents in very senior capacities -- President Clinton and President Obama. What is Obama like?

You know, again, in the business community there's this fear, he's -- is he very left wing, is he a quasi-socialist? There are others who feel he's not enough of a leader, he's subcontracted everything to Congress, the stimulus, health care.

What's -- what is he like as -- as a person to work with?

SUMMERS: I found him to be an extraordinary figure. He has the gift that I think great leaders do of both understanding, setting broad direction, delegating, insisting on principle on the one hand but being pragmatic and willing to reach out on the other.

And I think the results speak to themselves. I mean, the test of a leader is whether they're responding to the challenges of their time, and I think everybody would agree, both those who favor the measures that have been taken, as I do, and those who would disagree, that in terms of the amount that has happened that has changed the United States between the Recovery Act, the reform of financial regulation, the provision of universal health insurance, the change in America's position in the world, the withdrawal from Iraq, the changes that have come in the American educational system, that this has probably been the most consequential two years of a presidency, certainly since the first two years of Lyndon Johnson's second term in 1965 and perhaps going back further than that.

I think the president has been just terrific on that.

ZAKARIA: But you know, it's easy to give tax cuts. Honestly, it's easy to raise spending. It's hard to get the budget deficit in order. Even on the health care bill, it's easier to expand coverage than it is to come down on costs.

So on all those issues it seems like we've had a very tough time, and if you look at the consequences, you're beginning to already see them. You're seeing rating agencies saying that America may not be able to keep its -- its bond ratings for fear that the fiscal situation in America is going to deteriorate so sharply.

SUMMERS: Fareed, I'd say -- I'd say two things -- two things about that. First, in terms of tough things, the financial industry spends a million dollars per congressman, four lobbyists for every member of Congress, working to block regulation that will change things. And this president brought about the largest change in financial regulation in 50 years. That's not something that was easy.

ZAKARIA: The bottom line --

SUMMERS: But you raise -- you raised the deficit.

(CROSSTALK)

SUMMERS: -- the deficit, and the deficit is surely heavily defining of whatever we do in the economic area going forward.

The priority for the last two years was getting the economy growing. You know, if you look at it, that is the largest determinant of where our debt is going to be. If we have Japan-style stagnation, which looked like the likelihood 18 months or two years ago, there is no way, as the Japanese experience demonstrates, no matter what we do to tighten our belts, that we will get to a reasonable posture.

So the president made exactly the right decision to put first things first, and the first thing was accelerating the growth of this economy. He's used his first two years to lay a foundation for growth to pick up. At the same time, I think the right foundation for deficit reduction going forward, and there's no question that that's got to be a priority over the next several years.

But if we had attempted that first, if we had attempted deficit reduction as the first -- as the first step, the likelihood is that we would be looking at a much weaker economy and, as a consequence, ultimately we'd be looking at much larger debt problems.

ZAKARIA: But the premise -- your -- your answers on this are premised on growth. So I've got to ask you, you really think we have turned the corner and you are bullish on growth in America, what do you think the number -- American growth number will clock in at for 2011?

SUMMERS: Oh, I'm close enough to being in -- to being in government to know that, as Harold Wilson once suggested, you should name a number or name a date but never name both.

But seriously, Fareed, I -- I'd expect growth to be comfortably above three percent over the next several years and I think --

ZAKARIA: But that's not -- that doesn't give (INAUDIBLE).

SUMMERS: I think we'll -- and I think we'll start -- and I think we'll start to -- and I think we'll start to see before long growth getting closer to four than to three.

ZAKARIA: Let me ask you a final question. You've watched, as all of us have, the murders in Arizona. What you -- what was your reaction?

SUMMERS: My reaction was, as somebody who believes in freedom, that I do not understand what important value is served by allowing clearly disturbed individuals to purchase automatic guns whose only purpose is to be able to kill many rapidly. Not to hunt, not to self- defense, only to kill. And why we -- why that freedom should be treated as a fundamental freedom is not something I can understand.

And I hope we will see not some vast new initiative with respect to gun control but simply a return to the laws that we had over a significant era when we didn't have any political assassinations in the United States, the most basic kinds of background checks for the most extreme kinds of weapons. That is something concrete and real that we can and we should do.

ZAKARIA: Larry Summers, pleasure to have you on.

SUMMERS: Thank you.

ZAKARIA: And we will be right back.

(END VIDEOTAPE)

(BEGIN VIDEO CLIP)

BARACK OBAMA, PRESIDENT OF THE UNITED STATES: We don't have a stronger friend and a stronger ally than Nicolas Sarkozy and the French people.

(END VIDEO CLIP)

(COMMERCIAL BREAK)

ZAKARIA: Now for our "What in the World" segment. Fleet Street was frantic this week. The British press was all in a tizzy over what it saw as a major slight. It all goes back to Monday and a line that could easily have been missed in the remarks President Obama made at the White House after a meeting with the French president, Sarkozy.

Listen to what President Obama said.

(BEGIN VIDEO CLIP)

OBAMA: We don't have a stronger friend and a stronger ally than Nicolas Sarkozy and the French people.

(END VIDEO CLIP)

ZAKARIA: Britain, of course, loves to speak of its special relationship with the United States, and France is the nation Britain loves to hate, and I think the feeling is pretty mutual. Remember what then-President Jacques Chirac was caught saying about Britain when he thought the mikes were off, "You can't trust a people who cook as badly as that." I think he needs to travel to London and eat out more.

Anyway, Obama's one line set off a virtual firestorm in London. The "Daily Mail" headline read, "France is Our Biggest Ally, Declares Obama." The "Mirror," "Barack Obama Snubs Britain by Saying France is His Biggest Ally." "The Express." "UK Fury as Obama Cozies Up to France." The "Mirror" again, "Obama's French Kiss, He Calls Sarkozy His Strongest Ally." The "Guardian," with a bit of that subtle British humor, "France, America's Special Friend." "The Telegraph's" perhaps more thoughtful Niall Gardner wondered why America had gone to bed with a nation that, quote, "knifed Washington in the back over the war in Iraq."

Calm down, Britain. An extensive GPS study shows that President Obama was probably not downgrading the Brits and promoting the French to the top spot. You see, there is no real top spot. Words like, quote, "no better friend," quote, "no stronger ally," et cetera, are used frequently to describe our top echelon of allies to make everyone feel important.

Indeed, President Obama said almost exactly the same thing about the Brits and Prime Minister Cameron just a few months ago.

(BEGIN VIDEO CLIP)

OBAMA: The United States has no closer ally and no stronger partner than Great Britain.

(END VIDEO CLIP)

ZAKARIA: In fact, I wonder whether there's some law buried in the books somewhere that American politicians must refer to allies this way.

(BEGIN VIDEOTAPE)

GEORGE W. BUSH, FMR. PRESIDENT OF THE UNITED STATES OF AMERICA: America has no truer friend than Great Britain.

COLIN POWELL, FMR. U.S. SECRETARY OF STATE: We have no better friend in the world than Germany.

CONDOLEEZZA RICE, FMR, U.S. SECRETARY OF STATE: We have no better friend than Japan. We have no better friend than Jordan.

BUSH: We've got no better friends than Canada.

HILLARY CLINTON, U.S. SECRETARY OF STATE: The United States has no better friend than Australia.

JOSEPH BIDEN, VICE PRESIDENT OF THE UNITED STATES OF AMERICA: The United States has no better friend in the community of nations than Israel.

(END VIDEOTAPE)

ZAKARIA: Now, as you can see, one might accuse the United States of being a little promiscuous with its friendships. As in that town in Lake Woebegone, where everyone is above average, America has many, many bestest friends.

But I think the Brits can sleep soundly tonight knowing that the United States is still indeed, in their words, Britain's special friend. Really, you are. We'll be right back.

(BEGIN VIDEO CLIP)

ZAKARIA: So in the United States -- in the United Kingdom, there are six guns for every 100 people. We have 90 guns for every 100 people. What is the difference in the murder rate in Britain? The murder rate in the United States is 44 times higher than the murder rate in England and Wales. Surely these two facts are related.

(END VIDEO CLIP)

(COMMERCIAL BREAK)

(BEGIN VIDEOTAPE)

ZAKARIA: There are 90 guns for every 100 Americans. That is the highest ratio in the world by far. The next highest country, by the way, is Yemen, which has 60 guns for every 100 people. The United States owns 30 percent of all known guns in the entire world and more than 50 percent of all new guns made in the world are bought in America, which has of course five percent of the world's people. These are all statistics from a worldwide study called the Small Arms Survey.

So what is it that makes America so different? Is it cultural? Is it constitutional? And what does it have to do with Arizona? We've gathered a terrific panel to talk about these kinds of issues.

Bernard-Henri Levy is perhaps France's best-known public intellectual. He has a new book out called "Public Enemies." Mark Ames is the author of a book that looks at why people in his words go postal. James Taranto is a columnist for the "Wall Street Journal." And Richard Cohen is a long-time columnist for the "Washington Post."

Welcome to all of you. Richard Cohen, the part -- the part -- you wrote a column about the part that I'm just fixed on and find fascinating, which is fine, you know, people are crazy, you can't account for -- for these things, maybe there are some underlying causes, maybe some rhetoric feeds into it, but the one thing you can say is it seems awfully easy for people like this in America to buy semi-automatic guns that fire hundreds of rounds.

RICHARD COHEN, WASHINGTON POST: Right. It's -- it's kind of amazing. I always go back to Ralph Nader, who taught us all a good lesson. Ralph Nader looked at automobile accidents and say people are going to drive drunk, they're going to drive stupidly, they're going to drive negligently, they're going to drive when they're too old, they're going to drive when they're too young. The one thing you can deal with is the car. Design a car that will survive a crash.

You are going to have crazy people in this country. You wouldn't know what to do with them. You can't just arrest them. You can't put them in jail. You can't put them in insane asylums. The one thing you can control is the gun and access to the gun. And we don't do it.

We have a 22-year-old kid who's literally got bubbles coming out of his ears. He's so, so crazy. He's getting crazier and crazier. He goes in and buys a lethal weapon and a weapon that can kill numerous numbers -- numbers of people in a -- in a matter of seconds, and it's perfectly legal.

ZAKARIA: So James, I look -- I look at these numbers, and I think to myself, this seems so obvious. So in the United -- in the United Kingdom there are six guns for every 100 people. We have 90 guns for every 100 people. What is the difference in the murder rate in Britain? The murder rate in the United States is 44 times higher than the murder rate in England and Wales.

Surely these two facts are related, the fact that it is so much easier to buy a gun in America means that there is so much more crime -- after all, culturally we sort of come from the same stock, Britain and the United States.

JAMES TARANTO, THE WALL STREET JOURNAL: I don't know. I think we would need -- we would need to look a lot more closely to rush to those sorts of conclusions. Remember, people also use guns in self- defense. In places where people are armed people are perhaps less likely to -- to pull out a gun because of the possibility that people will -- will defend themselves.

And, you know, 90 guns for every 100 people. Well, the vast, vast majority of those guns are never used in a crime. And so why are we picking on law-abiding citizens who want to use guns?

ZAKARIA: Bernard-Henri Levy, what does this debate look to you like from Paris?

BERNARD-HENRI LEVY, FRENCH PHILOSOPHER/INTELLECTUAL: Not from Paris. From here. First of all, it's a tragedy, what happened in Arizona is a tragedy. In front of such a tragedy you have two -- two ways to see it -- clinical way or political way -- clinics or politics.

I'm not the father of the murder. So I don't deal with clinic. I don't want to know if he's crazy or not. We have to deal with that politically. Not clinically, politically. Politically means what? Two things. Number one, as you said, the easiness to purchase some heavy weapons in this country. I visited, when I wrote my book about America, some weapons fair in America. In Texas, for example, I saw average guys going to buy heavy machine guns as you go to the grocery to buy aspirin -- this is insane. And you tell me the majority does not -- is not use to commit crimes. Thanks God -- thanks God the majority does not have to commit crimes. One is enough to create the bloodbath of last week, number one.

And number two, I'm sorry to say that, but you have today in this very wise country, which is America, America was the fatherland of pragmatism, of civilized dialogue between Republican and Democrats, it was a model, and it is still a model, American democracy is a model of wisdom. Accept that.

Since a few months you have a sort of burning of the debate, a climate of hatred which is not without a link with what happened. Of course, you cannot put a cause and an -- and an effect. But you cannot disconnect the two completely. That's what we say a while back in our book. When you burn the words, you have burning in the -- in the grounds.

ZAKARIA: So Mark, you've written a long piece in "Vanity Fair" about this. Why -- what's going on? Why does this happen in America so often?

MARK AMES, AUTHOR, "GOING POSTAL": Well, when I wrote my book, "Going Postal," I was -- I was interested in this particular crime because these mass shootings in workplace, first they started actually in post offices, which is why they call it going postal, then they moved on to sort of the private work -- workforce, and then to schools. They've turned out, first of all, you can't really profile these killers because they could be really anybody.

So I decided instead to profile the world that kind of made them. And that is when it became clear to me that the changes that took place in this country under Reagan, you know, under Reaganomics, when inequalities started to appear and, you know, wealth inequalities got much worse, unions were broken, the work -- the workplace became a lot -- a lot worse, I mean, sort of corporate culture became a lot more difficult and stressful for the average worker in a way that -- that Americans hadn't really seen pretty much since the end of World War II.

ZAKARIA: But you cannot possibly say that because America became a tougher, rougher place that's why --

AMES: I think you can, actually.

ZAKARIA: -- the people started going out with machine guns and shooting -- AMES: I think you can because today we have the worst wealth inequality of any time in our history except for 1928. And inequalities like that create all kinds of illnesses, you know?

ZAKARIA: I'm going to guess, James Taranto, you're going to disagree with that.

TARANTO: Well, here's the obvious flaw in the argument you're making. We talked about going postal, right? OK. Postal workers have government benefits. They are members of a union. They're not the victims of income inequality.

Furthermore, this fellow in Tucson was a student. He was 22 years old -- is 22 years old, I guess we should say, because -- because he did survive the attack. And there's nothing -- no facts have come out that suggest any kind of economic angle to it.

So it seems to me that you're just -- you know, you're not saying anything that you wouldn't have said if you had been on this show two weeks ago and I don't see what it has to do with the -- with the situation at hand.

ZAKARIA: When we come back, we're going to talk about whether the political climate produces political violence. This is the question of the hour. We'll be right back.

(COMMERCIAL BREAK)

CANDY CROWLEY, CNN SENIOR POLITICAL CORRESPONDENT: I'm Candy Crowley, and here are today's top stories.

A man who was shot but survived last week's Arizona rampage is being held in a mental health services unit after making a death threat at a Tucson town hall meeting. Sixty-three-year-old James Fuller told Tea Party member Trent Humphreys, quote, "You are dead" as Humphreys was making comments at the gathering. Humphreys said he has not decided whether to file charges against Fuller but is leaning toward that action.

Congresswoman Gabrielle Giffords is off a ventilator and breathing on her own through a tracheotomy tube. It is the latest milestone for Giffords, who nonetheless remains in critical condition.

Another person wounded in the incident, 58-year-old James Tucker, was released from the hospital Saturday.

And just a week after the shootings thousands of people attended a gun show in Tucson, a gun show spokesman says the mood at the gathering is somber. Donations are being taken at the two-day event to assist shooting victims and their families.

Those are your top stories. Up next, much more FAREED ZAKARIA GPS and then "RELIABLE SOURCES" at the top of the hour.

(COMMERCIAL BREAK)

(BEGIN VIDEOTAPE)

ZAKARIA: And we are back with our panel. The question we are trying to sort through is whether or not political violence can be attributed in some way to political rhetoric -- Richard Cohen.

COHEN: I think it can. My expert on this is my wife, a clinical psychologist, who tells me of course it has an effect. We all swim in a certain sea, and we hear certain things and everything. But I don't think it did in this case. I mean, after all, the primary target was a moderate. I mean, about as obscure as possible. I never even heard of her until she was shot. Certainly belonged neither to the right wing nor the left wing of her own party. Was not -- I don't -- we'll never have an idea of why he -- why he shot her and was after her. He seemed to be apolitical. He just seemed to be losing it totally going crazy -

TARANTO: Wait a minute. We have reports as to what happened. He went to see her in 2007, according to his friends. He asked her a question about government control of grammar or some unhinged thing that made no sense. He wasn't satisfied with her answer. And he nursed a grudge against her for the next few years.

COHEN: But that's not political.

TARANTO: That's my point. But to call this political violence is either a misjudgment or just an outright lie. I mean, "The New York Times" has been waging a witch hunt against conservative media figures, blaming them for this, based on this lie that this was an act of political violence. It simply was not. No one had heard of Sarah Palin when this guy developed his grudge against Gabrielle Giffords.

ZAKARIA: Is the political rhetoric coming out of right-wing talk shows, charged political rhetoric -

AMES: I think -

ZAKARIA: -- likely to influence people?

AMES: Well, I think obviously yes. And I think obviously having more guns makes it more likely that there are going to be more killings. Every statistic shows that. That doesn't mean that we can ban guns or should because of our constitution, but to deny that there's a link I think is -- is just -- it's out there.

TARANTO: But there's a link only in the obvious sense that if there were no guns there would be no gun violence.

LEVY: You have also precise reports. We know that among his best list of books you have "Mein Kampf." He had "Mein Kampf" --

TARANTO: And the "Communist Manifesto" and "The Wizard of Oz and all sorts of books.

LEVY: I know. I know. "Mein Kampf" and the "Communist Manifesto" is a program which is not a program of moderation, of wisdom, and of democratic dialogue. And when Sarah Palin expressed these very strange words, saying that she's a victim of a blood libel, again it is very strange. A blood libel, everybody knows what is a blood libel. A blood libel was about the Jews being supposed to be guilty of using blood of Christians to make the Passover bread.

So there is all this atmosphere also around this tragedy. I have no -- I have no replies, but I have questions. And these questions must be raised.

ZAKARIA: Richard Cohen, do you have answers?

COHEN: I have nothing but answers. I don't think for a second that Sarah Palin knew the meaning of blood libel. I just don't. There's nothing in her background which suggests it. And if she did, I don't think she used it all that inappropriately. I mean, if it refers to a false accusation for which a community is blamed then she was right.

LEVY: Hold on. You think Sarah Palin is stupid enough not to know what a blood libel is?

COHEN: How much time do we have left to talk about how stupid Sarah Palin is?

LEVY: No, no, no. Frankly, I don't believe --

(CROSSTALK)

TARANTO: Look, the blood libel is a -- is a lie about the killing of children. Remember, there was a child who was killed in this attack. And the "New York Times" leading the way but others particularly in the media and a few politicians, but mostly this has been the media, went out and blamed conservatives, particularly conservative media figures, which is what Sarah Palin is, for the death, among others, of this child. So blood libel, yes, she's not using it in the literal sense. It is often used in metaphorical senses. I could give you a list of examples from the "New York Times," the "Washington Post," various liberal commentators, who've thrown around the term blood libel --

LEVY: I'm waiting for the list. Give me the list of the example of the metaphorical use of blood libel if it is -

TARANTO: Representative Deutsch -- Representative Peter Deutsch in 2000, a Democrat of Florida, said --

LEVY: If you use blood libel in this way, maybe you are right --

TARANTO: Nobody has said it was obscene until now.

LEVY: I say today it is obscene in whoever mouth it is.

ZAKARIA: And we are going to try to keep this at a -- at a civil level, which means of course we're going to leave and everyone can quarrel off camera.

Thank you all very much. We will be right back.

(COMMERCIAL BREAK)

ZAKARIA: Our question this week from the "GPS Challenge" is the discovery of the world's earliest winemaking operation dating back some 6,000 years was announced this week. Where was this archaeological find? A, Italy. B, Algeria. C, Israel. D, Armenia. Stay tuned, and we'll tell you the correct answer.

Make sure you go to CNN.com/GPS for 10 more questions. And while you are there, check out our podcast, which you can also subscribe to on iTunes. That way you don't miss the show and it's of course free.

If you want to read up on China before President Hu Jintao visits Washington, there's a very interesting book you can take a look at. Richard McGregor's "The Party: The Secret World of China's Communist Rulers." McGregor takes us inside the intensely secretive world of the highest echelons of power in China. We sometimes forget China is actually run by a Communist Party, set up very much the way Lenin wanted to set up the Communist Party.

So who are these people? What is this organization that is running the largest rising new power in the world system? McGregor answers these questions pretty well.

And now for "The Last Look." What you're looking at here is a pay stub. The pay stub of a world leader, Israeli Prime Minister Binyamin Netanyahu. In an effort to prove his government's transparency, Netanyahu says he wanted to show the world just how much he gets paid. The answer -- just under $150,000 a year. And Mr. Netanyahu reportedly has to pay his own cell phone bills and newspaper subscriptions.

Now, the president of the United States makes $400,000 a year, and I'm pretty sure he doesn't have to pay for his copy of the "Washington Post" every morning.

According to the "Economist," other world leader salaries range from a high of $2.2 million a year for Singapore to just over $4,000 a year in India. Prime Minister Netanyahu's salary is less than what even former presidents of the United States are paid. These guys will each get more than 200,000 taxpayer pension dollars in 2011 plus a huge office and security, et cetera.

For this week's "GPS Challenge" question, we asked you where the world's oldest winemaking operation was discovered. The correct answer was Armenia, D. Scientists say the wine they were drinking 6,000 years ago probably tasted a lot like Merlot. Go to our website for more questions and answers.

Thanks to all of you for being part of my program this week. I will see you next week. Stay tuned for "RELIABLE SOURCES."